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Analysis of the nature of primary transmission impulses of Russian monetary policy: a VEC approach

Available online: 19 May 2010

Subject Heading: MONETORY AND CREDIT POLICY

JEL Classification: 

The article is devoted to the analysis of impulses summoned by shifts in Russian money supply, outgoing to primal elements, combining gross domestic product, i.e. consumption of goods and durables, capital investment, public expenditures and net export. The employed VEC model makes it possible to unravel long- and short-term relationships between money supply and named GDP components indicating that the short-run behavior of received interdependences contradicts theoretical chains of transmission mechanism thus currently compelling Bank of Russia to minimize its interference into the economy. In the mean time the long-term relationship is consistent with the theory of monetarism.

Keywords: money supply, monetary transmission mechanism, monetary policy

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ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

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